Gap to be first U.S. retailer to sell ‘Made in Myanmar’ goods after embargoes lifted

High street giant Gap is to become the first American retailer to source garments made in Myanmar, the US embassy in Yangon said, over a decade after sanctions against the former junta slashed the country’s textile industry.

The US embassy said products made at two Yangon factories would be in Gap stores by this summer, in the latest sign of growing interest from multinationals in the fast-changing former pariah state.

Most Western embargoes on Myanmar — which previously blocked exports from the Southeast Asian nation — have been lifted in response to wide-ranging democratic reforms introduced in 2011.

“The garment industry stands poised to become a significant source of jobs, exports and opportunity for the people of this country,” the US embassy said in a statement.

“By producing its products from two factories in Yangon, Gap Inc. becomes the first American retailer to enter the Myanmar market,” it said.

Gap will operate in partnership with the US Agency for International Development (USAID) on a project to improve skills among Myanmar’s largely female textile industry workforce.

“By entering Myanmar, we hope to help accelerate economic and social growth in the country, and build on our track record of improving working conditions and building local capacity in garment factories around the world,” said Wilma Wallace, the vice president of Gap’s Global Responsibility division.

Myanmar was left impoverished after decades of economic mismanagement under the former junta, as well as years of sanctions by the West imposed in protest at the government’s dire human rights record.

– Reviving garment exports –

Garment exports, which had hit a high of $850 million in 2001, plunged after the US toughened sanctions in 2003 in protest at the junta’s detention of pro-democracy leader Aung San Suu Kyi, according to Myanmar textile industry figures at the time.

But a quasi-civilian regime that came into power three years ago has ushered in a broad spectrum of changes — including welcoming Suu Kyi and her opposition party into parliament.

The reforms have generated hopes of an investment boom in the resource-rich nation of about 60 million people.

US firms including drinks makers Coca Cola and Pepsi and carmakers Chevrolet and Ford have already established a sales presence in the country, as exports to Myanmar soared from $9.8 million in 2010 to $145.7 million in 2013.

American imports from Myanmar have also started to grow, with their value rising from zero in 2012 to $30.1 million last year.

The US embassy statement, which was released following the signing of the USAID partnership on Saturday, added that Gap would ensure the factories it is sourcing from meet “internationally recognised human rights and labour standards”.

The garment industry has been in the spotlight in Asia in recent years because of concerns over labour rights and safety.

Violent crackdowns on striking textile workers in Cambodia most recently raised fears over the sector, which employs about 650,000 people in the country and provides clothing for Western high street brands including Gap, H&M, Puma and Levi’s.